If a firm has an accounting profit of $2,350,000 and implicit costs totaling $150,000,then its economic profit equals
A)$2,350,000
B)$2,500,000
C)$2,200,000
D)$150,000
E)$2,000,000

Question

Quizplus · Accepted Answer

Economic profit equals accounting profit minus implicit costs. Therefore, the economic profit in this case would be $2,350,000 - $150,000 = $2,200,000. Choice C is the correct answer.

If a Firm Has an Accounting Profit of $2,350,000 and Implicit